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Lamy eyes WTO top job, but opposition is strong

The World Trade Organization (WTO) has until the end of May to appoint a successor to Thailand’s Supachai Panitchpakdi, whose mandate as director-general expires on 1 September. Four candidates are to introduce themselves to member states on 26 January in Geneva. The choice will not be easy.

In 1999 the WTO was in serious trouble. When negotiations at Seattle collapsed under the diverging interests of its 148 members, the organisation’s future was called into question as never before.

Perhaps they should have seen it coming. Earlier that year the ‘haves’ and ‘have-nots’ fought a bitter battle over who should head the organisation for the next four years, with little compromise on either side.

Four months on and the organisation was still rudderless, until members accepted a coerced compromise, which saw New Zealand’s Mike Moore becoming director-general for a curtailed three-year term, followed by Panitchpakdi for another three years.

But the resentment caused among the poor and poorest countries by Moore’s resilience soured the milk so much, say some observers, that the usual north-south arguments were destined to be revisited at Seattle in more acrimonious form.

Now it is time to do it all over again. By the end of May the 148 must find one man (no woman has been put forward) to guide the WTO towards a new set of trade rules and more immediately through a difficult December ministerial conference in Hong Kong.

In the best tradition of the WTO a ‘framework’ has been put in place to stop negotiations from getting bogged down, but crucially members must still agree on the appointment by consensus.

Familiar interests are again represented. The Cairns Group of agricultural exporters and Mercosur are represented twice in the form of Uruguay’s Carlos Pérez del Castillo and Brazil’s Luiz Felipe de Seixas Corrêa. The developing countries of the African, Caribbean, Pacific (ACP) group are represented by Jaya Krishna Cuttaree of Mauritius and Europe’s contender is ex-European trade commissioner Pascal Lamy.

Pascal Lamy

Pascal Lamy, who left Brussels just a couple of months ago, is seen as one of the front runners in the race. Despite the rancour caused by the Iraq war, the Frenchman is well respected in Washington and can count on the United States’ support, thanks in part to his famously close ties with the outgoing US Trade Representative Robert Zoellick.

But history weighs heavily on Lamy. In the fifty years since the WTO’s predecessor GATT (General Agreement on Tariffs and Trade) was created, only two of the seven heads have been non-Europeans and with the US and Europe currently leading the World Bank and International Monetary Fund respectively, the pressure to choose a developing country’s candidate could be immense.

According to Richard Tarasofsky of Chatham House, “Lamy faces an uphill struggle”. Some of the ex-commissioner’s comments and his background as head of one of world trade’s ‘elephants’ could stand against him. Lamy’s calls for reform of an organisation that he described as “medieval” have worried some. But his talk of “collective preferences” has been seen by developing countries as nothing short of protectionism.

Carlos Pérez del Castillo

Carlos Pérez del Castillo is seen as an insider. As former head of the WTO General Council he has an intimate knowledge of the WTO’s levers, as well as the detail of this round of trade talks. Both are useful skills considering the work that needs to be done to complete the Doha Round.

As head of the WTO’s chief decision-making body he was largely responsible for picking up the pieces after the failed ministerial in Cancún in 2003, holding hundreds of meetings with delegations to try to find a way forward.

But he suffers a similar disadvantage to his rival, Luiz Felipe de Seixas Corrêa. The failure of Mercosur and the Cairns Group to unite behind one candidate threatens to split the vote. And with Kenya’s trade minister now out of the running, his call for the next director-general to be Latin American or African could go unheeded.

Luiz Felipe de Seixas Corrêa

The last to put forward his name, Brazil’s representative at the WTO Luiz Felipe de Seixas Corrêa holds a strong position, according to some trade watchers. Since announcing his candidature de Seixas Corrêa has tried to promote Brazil’s image as a champion of poorer countries, promoting the importance of development in the Doha Round. He has sought to distance Brasilia from its membership of the Cairns group of agricultural exporters, in a bid to win the support of the poorest WTO members.

But his attempts to do so may not be enough to convince the ACP countries to abandon their candidate, or to persuade the US that a Brazilian would not push hard for substantial agricultural concessions, which both the Europeans and the US have so far resisted. A career diplomat, he could benefit from his experience serving in the US, Europe, Argentina and at the United Nations.

Jaya Krishna Cuttareee

Despite the clear development focus of the Doha round of negotiations, Mauritius’s foreign and trade minister is undoubtedly an outsider in this race.

After his stint as the president of the ACP’s Council of Ministers, his profile is relatively high. But conversely the ACP’s power does not reflect its 77-strong membership and he will have to lobby hard to put himself in the running.

According to Andreas Schneider of the Centre for European Policy Studies, Lamy’s talk of moving the WTO towards majority voting could steer the ACP behind the Frenchman. “If there would be reform toward majority voting, the G20 of industrialised countries would lose influence,” he says.

But Cuttaree should not be ruled out. The current director-general, Supachai Panitchpakdi, was also given slim chance of success and another dual stewardship is not impossible.